NEW YORK (TheStreet) -- American Capital Agency Corp. (AGNC) shares were poised for a rally Wednesday morning as investors digested news about the mortgage real estate investment trust's reduced dividend.
AGNC cut its quarterly dividend to $1.05 per share from the $1.25 it had paid previously, the REIT announced before Tuesday's market close. AGNC shares were flat to lower in late trading Tuesday, finishing the day a penny higher at $25.34.
However, they were up more than 3% in pre-market trading Wednesday.
The dividend cut was "arguably in line with most expectations," according to a report published late Tuesday from Sterne Agee analyst Henry Coffey, who predicted a "snap-back" trade. Longer-term, Coffey's sector favorites are Dynex (DX), MFA Financial (MFA) and PennyMac (PMT).-- Written by Dan Freed in New York. Follow @dan_freed
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